Draghi extends QE, fails to deliver on size increase

FXStreet (Mumbai) - Mario Draghi admits persistent low inflation rate reflects sizeable economic slack. Yet, he is hawkish, very unlike his previous stances. Domestic demand expected to be further supported by monetary policy. Low oil price, he says will support household disposable income thereby supporting private consumption.

HIGHLIGHTS

- Inflation forecast unchanged for 2015 and 2016. Inflation forecast estimated at 1.6 per cent for 2017 as against 1.7 per cent estimated earlier
-GDP to grow 1.5 per cent in 2015, 1.6 per cent and 1.7 per cent in 2017
-ECB to extend asset purchase program beyond October 2016 to March 2017
- The central bank will buy regional bonds
- No increase in QE value per month
- Will reinvest QE proceeds
- Risks to economic outlook are on the downside.